Consider the following information for Presidio Inc.'s most recent year of operations. Number of units produced 2,800 1,700 Number of units sold Sales price per unit Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit ($331,240 + 2,800 units) Total variable selling expenses ($12 per unit sold) Total fixed general and administrative $ 670.00 50.00 80.00 30.00 118.30 20,400.00 78,000.00 expenses Required: 2-a. Complete a full absorption costing income statement for Presidio. Assume there was no beginning inventory. 2-b. Complete a variable costing income statement for Presidio. Assume there was no beginning inventory. 3. Compute the difference in profit between full absorption costing and variable costing.
Consider the following information for Presidio Inc.'s most recent year of operations. Number of units produced 2,800 1,700 Number of units sold Sales price per unit Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit ($331,240 + 2,800 units) Total variable selling expenses ($12 per unit sold) Total fixed general and administrative $ 670.00 50.00 80.00 30.00 118.30 20,400.00 78,000.00 expenses Required: 2-a. Complete a full absorption costing income statement for Presidio. Assume there was no beginning inventory. 2-b. Complete a variable costing income statement for Presidio. Assume there was no beginning inventory. 3. Compute the difference in profit between full absorption costing and variable costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Transcribed Image Text:Consider the following information for Presidio Inc's most recent year of operations.
Number of units produced
2,800
1,700
Number of units sold
Sales price per unit
Direct materials per unit
Direct labor per unit
Variable manufacturing overhead per unit
Fixed manufacturing overhead per unit
($331,240 + 2,800 units)
Total variable selling expenses ($12 per
unit sold)
Total fixed general and administrative
$
670.00
50.00
80.00
30.00
118.30
20,400.00
78,000.00
expenses
Required:
2-a. Complete a full absorption costing income statement for Presidio. Assume there was no beginning inventory.
2-b. Complete a variable costing income statement for Presidio. Assume there was no beginning inventory.
3. Compute the difference in profit between full absorption costing and variable costing.
X Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 2A
Req 2B
Req 3
Complete a variable costing income statement for Presidio. Assume there was no beginning inventory.
Presidio, Inc.
Variable Costing Income Statement
Sales
$ 1,139,000
Variable Cost of Goods Sold
272,000
Variable Selling Expense
20,400
Contribution Margin
56,454 X
Contribution Margin
846,600
Less: Fixed Costs
Fixed Manufacturing Overhead
36,333
Fixed Manufacturing Overhead
331,240
Fixed General and Administrative Expense
78,000
Net Operating Income
$
437,360
< Req 2A
Req 3 >
Transcribed Image Text:Consider the following information for Presidio Inc.'s most recent year of operations.
Number of units produced
2,800
1,700
Number of units sold
Sales price per unit
Direct materials per unit
Direct labor per unit
Variable manufacturing overhead per unit
Fixed manufacturing overhead per unit
($331,240 + 2,800 units)
Total variable selling expenses ($12 per
unit sold)
Total fixed general and administrative
$
670.00
50.00
80.00
30.00
118.30
20,400.00
78,000.00
expenses
Required:
2-a. Complete a full absorption costing income statement for Presidio. Assume there was no beginning inventory.
2-b. Complete a variable costing income statement for Presidio. Assume there was no beginning inventory.
3. Compute the difference in profit between full absorption costing and variable costing.
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 2A
Req 2B
Req 3
Complete a full absorption costing income statement for Presidio. Assume there was no beginning inventory.
Presidio, Inc.
Full Absorption Income Statement
Sales
O $ 1,139,000
Cost of Goods Sold
473,110
Beginning Inventory
54,000
Gross Margin
665,890
Less: Non-Manufacturing Expenses
Fixed General and Administrative Expense
20,400
Contribution Margin
78,000
Fixed General and Administrative Expense
78,000
Variable Selling Expense
57,000
Net Operating Income
$
567,490
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